Our guide to navigating your way through the complex process of applying for a business grant, and how to beat out the competition as you do
For a new or pre-launch start-up, applying for a business grant can be an excellent way to kickstart growth.
But with thousands of grant schemes available in the UK at any given time, how do you go about finding – and winning – the right one for you? Read on to learn how to get a business grant.
What is a business grant?
Awarded by government bodies and organisations, grants offer entrepreneurs who are running new companies – or looking to fund the development of a start-up idea – a cash award, free equipment and tools or reduced costs for using resources to boost progression.
Cash awards can range from hundreds of pounds to hundreds of thousands depending on the scheme, and you often won’t have to pay interest, give away equity, or pay them back at all – a big reason why they’re revered as a fantastic option for start-ups.
By handing out grants, organisations aim to aid businesses who are working towards a specific goal that will have a tangibly positive impact on lives, a particular industry or the economy. So, tempting as it is to think of it as free money, keep in mind that the awarding body will want a valuable output from your business (just like you do).
Each grant will have a different application process, with different entry criteria and requirements to fulfil and different processes to follow. The larger the grant sum, the more complex the application process will be.
Adding to this the fact that grants are notoriously difficult to secure – competition for them is often fierce – it’s worth being prepared for a bit of stress and frustration if you decide to apply for one.
How to get a business grant
When you’ve found a grant you think your small business is eligible for, you can begin the lengthy process of trying to win it. Here’s how to apply for a business grant.
Before you begin the application process, make sure you have:
- A thorough, up to date business plan – download a free business plan template
- A clear work plan, including a breakdown what you plan to use the money for.
- A good account of your company’s business history – this will convince the awarding body that you are going to behave responsibly with the funding.
- An outline of how the awarding organisation will be meeting their objectives by awarding you the money.
- Funds available to match the grant sum. Grants don’t exist to finance 100% of your project, and many grant schemes will require you to invest an equal amount into the business yourself.
There are a few things you can do to shoot past the competition and give yourself the best possible chance of winning your chosen grant. Here are our top tips:
1. Apply as soon as possible
The very best time to apply for a grant is when it first opens: the awarding body will still have the full fund to give away and fewer businesses will be aware of it, meaning competition won’t be so strong. Make sure you’re continually keeping an eye on the space so you know when a relevant grant is upcoming.
2. Make a personal contact at the awarding body before you apply
This will mean that if there are any problems or your grant application doesn’t seem to be progressing, you’ve got someone to call who knows you and your business and so can give personalised advice.
3. Consider appointing a grant consultant
A grant consultant can help you to track down the grants best suited to you, saving you hours of research, and will also have a better chance of communicating with the organisation and keeping tabs on your application’s process, particularly if it’s been submitted to a large organisation that’s difficult to approach, like a European body.
However, consultants can be expensive to work with so you’ll need to weigh their cost up against their usefulness to you. Be wary also that some bodies don’t accept applications submitted through consultancies.
4. Avoid making too much business progress before applying
This might seem counterproductive, but awarding bodies need to see that you truly need their assistance in achieving real traction. Assure them that there’s no way you can proceed successfully without their help.
5. Pay close attention to the grant’s objectives
If an awarding body wants to fund innovative solutions to the technological skills gap in the UK, for example, highlight and emphasise how your business is doing this (only if it actually is, of course).
Be clear on the benefits your business will bring to the area of the grant’s attention, and explain that you need the money to fulfil these specific objectives, not that you need it to grow a profitable business.
6. Don’t be untruthful
If you need to bend the facts about your business to fit with the grant’s criteria, it’s not the right grant for you.
How long does it take to get a business grant?
The most frustrating aspect of applying for public money is how long the process can take. The general rule of thumb is that the more local your awarding body, the faster you’re likely to get a result.
Applications to your local authority or a Local Enterprise Partnership, for example, would probably be resolved in a matter of weeks, or even days. However, national organisations are more bureaucratic and could spend months coming to a decision. Similarly, European bodies can take many months.
How to find a business grant
Of course, you’ll have to research and find the grant that best fits your business before you start sending applications.
The three key sources of grant funding are:
- Government business grants – The UK government, Scottish Parliament and Welsh and Northern Ireland Assemblies have hundreds of grants on offer – you can search for government grants using the UK government’s finance and support finder tool.
- European business grants – The European Commission offers a range of grants, such as European Structural and Investment funds (ESIF) and the famous Horizon 2020. With Brexit impending, questions remain as to whether or not UK businesses should continue to apply for these, but generally speaking, many grants will accept applications from UK businesses until the country has officially left the EU, though the European Commission has warned that funding to UK enterprises could cease sooner. You can explore grants offered by the European Commission here.
- Local business grants – These are offered by local authorities, agencies and organisations with the aim of supporting businesses in their local areas. Examples include Local Enterprise Partnerships and the government’s Regional Growth Fund (RGF).
With so many grants on offer for a dizzying variety of purposes, you will need to dedicate time to finding the best one for you.
Often, grants will consider businesses based on a strict set of eligibility criteria, and you should use these to narrow down your options. Such criteria usually include:
- The business’ purpose – the industry you’re operating in (or plan to operate in) and the impact you want it to have
- Where you’re located
- The size of your business – how many employees you have
- How long you’ve been in operation for
Be sure to save yourself some time by making sure you fit all of the grant’s eligibility criteria before applying.
It’s also worth remembering that, while many grants aim to support particular types of businesses, there are plenty that are equally interested in the entrepreneur(s) behind them. For example:
Business grants for women
Organisations are increasingly looking to support women in business, particularly in industries such as tech where the disparity between male and female-owned businesses is considerable.
Some such organisations include Futures for Women, which focuses on training and education, Innovate UK’s infocus funding award, which offers support packages to female entrepreneurs, and the Anita Borg Institute for Women and Technology’s awards for women in tech – to name just a few.
Business grants for young people
With young entrepreneurs often cited as the future of UK business, plenty of awarding bodies are keen to support them.
One of the best-known is The Prince’s Trust, which offers mentoring, support and funding to entrepreneurs aged between 18 and 30. Others include UnLtd, which supports young social entrepreneurs, and Shell LiveWIRE, which awards young entrepreneurs who are tackling the world’s energy and resource crises.
Business grants for over 30s
That being said, entrepreneurship certainly has no age limit, and grant schemes won’t discriminate against older entrepreneurs.
In fact, starting a business in your 50s and beyond is now easier than ever, and grants and other alternatives to more traditional investment play a huge role in this, offering cash, reduced-price resources and benefits to aspiring business owners of all ages.
Business grants for the unemployed
You don’t need a spotless employment history to go far in business, and the aims of The New Enterprise Allowance (NEA) grant scheme reflect this thought.
Started by the government, the NEA helps aspiring entrepreneurs who are claiming Jobseekers Allowance, Employment and Support Allowance or Income Support to fund their business ideas.
Business grants for bad credit
Unlike bank loans, the majority of grant schemes won’t turn entrepreneurs away based on their credit history.
Government bodies in particular aim to boost the economy by encouraging enterprise and creating new jobs as small businesses grow, so try searching for government grants in your area.
Just be wary that, rather than assessing your credit score, many will want to know whether or not you can match the funding they award you.
Region-specific business grants
If you’re operating a business in Scotland, Wales or Northern Ireland, you might want to narrow down your search to grants offered specifically to businesses in those countries.
- Business grants in Scotland – Depending on where in Scotland you’re based, you may be able to apply for grants offered by Scottish Enterprise, Highlands and Islands Enterprise, local council and more. Search the government’s funding options in Scotland
- Business grants in Wales – From the Tourism investment support scheme, which supports tourism businesses, to the Ultrafast Connectivity Voucher Scheme, which aims to improve business’ broadband connections, there are a range of grants available to Welsh businesses. Try Business Wales’ finance locator to find one that’s right for you.
- Business grants in Northern Ireland – There are a variety of grants on offer to Northern Irish businesses, including NISPO II’s Proof of Concept grant for pre-launch start-ups, and Invest NI grants for slightly older companies – which range from the Propel Programme to the R&D grant. Visit NI Direct’s business support page for more.
With thousands of different grant schemes available to aspiring entrepreneurs, start-ups and small businesses in the UK, it’s more than likely that you’ll be able to find one that’s right for you and your idea or company.
If you can obtain one, a grant can bring a huge boost to your business – but to get the best result, you’ll need to dedicate time to researching the most fitting schemes, and be prepared for a difficult application process. Patience and perseverance is key – but the rewards are worth the effort!